Advanced estimates of Euro zone GDP revealed that the Euro zone economy contracted by 0.2% in the March quarter, posting its 6th successive quarterly contraction. Annual GDP growth reached a new low of 1%. Germany was the only major economy to grow with France joining Spain and Italy in a technical recession.
Chinese Premier Li Keqiang said early this week that government has limited room to use government spending and policy stimulus to boost its economy, dashing hopes among some investors that the government may take steps to foster growth. Li said that though the economy faces considerable headwinds and uncertainty, China should allow market forces to do their work. If there is an over-reliance on government-led and policy driven measures to stimulate growth, not only is this unsustainable, it would even create new problems and risks. His remarks were made at a meeting of the State Council, or China's Cabinet, on Monday after a series of data showed that recovery in the world's No. 2 economy faltered in April.
US stocks closed at new all-time highs on Wednesday, May 15, 2013, as investors focus on positive data on the recovering US housing market. US home builders' confidence rose this month, with sales expectations rising to the highest level in more than five years, a sign the housing market will keep driving the economic recovery. The National Association of Home Builders said Wednesday that its housing-market index was 44 in May, up three point s from April. All three components of the index rose, with builders' expectations of sales for the next with months hitting the highest level since February 2007. The results were above expectations.
The world's third-largest economy grew a real 3.5% in the first quarter on an annualized basis, the Japanese government said on Thursday, giving a strongest indication that the policies introduced by Prime Minister Shinzo Abe are bearing fruit. The expansion is in sharp contrast to 1% growth for the last quarter, which came after two quarters of contraction. The preliminary result was much stronger than the 2.8% growth forecast by economists. Japan's economic growth significantly outperformed its industrialized peers in the first three months of this year as consumers loosened their purse strings and exports to the U.S. picked up.
In Asia Pacific trading Thursday, Japan's Nikkei 225 fell 0.4% on profit taking despite Japan's Cabinet Office statement that the country's first-quarter GDP surged 3.5%, while Australia's S&P/ASX 200 fell 0.5% as commodity stocks weakened. Indonesia's JKSE lost 0.2%, Malaysia's KLSE fell 0.9%, and NZX50 shed 0.2%. The Shanghai Composite climbed 1.2%, Taiwan's Taiex gained 0.9%, South Korea's Kospi added 0.8%, Singapore's STI added 0.3%, and Hong Kong's Hang Seng Index rose 0.2%. India's Sensex was 0.2% higher.
Back to country wise, headline shares on the Japan's market suffered heavy profit taking pressure, dragging the Nikkei Stock Average 58.79 points lower from prior day closure to 15,037.24. Investors chose book some profit after the benchmark index surpassed 15,000 level previous day for the first time since December 28, 2007. Japan's share market had begun the day with firm footing on tracking overnight rally on Wall Street and better domestic GDP data for March quarter, with the benchmark Nikkei 225 stock index rose intraday to a peak of 15,155.72 before reversing toward downside on profit taking. It has gained 6.4% over the last four sessions, and about 75 percent since November in a rally linked to high hopes for Abe's policies, which have been dubbed Abenomics.
The world's third-largest economy grew a real 3.5% in the first quarter on an annualized basis, the Japanese government said on Thursday, giving a strongest indication that the policies introduced by Prime Minister Shinzo Abe are bearing fruit. The expansion is in sharp contrast to 1% growth for the last quarter, which came after two quarters of contraction. The preliminary result was much stronger than the 2.8% growth forecast by economists. Japan's economic growth significantly outperformed its industrialized peers in the first three months of this year as consumers loosened their purse strings and exports to the U.S. picked up.
Australian share market ended into the sea of red for second straight day despite a firm beginning, as investors continued withdrew money off the table, with shares of miners and specifically gold miners led retreat on weak precious metal prices. The broader All Ordinaries index down by 0.56% to 5144.2, while the benchmark S&P/ASX200 shed 0.5% to 5165.70.
New Zealand's shares fell, dragging the NZSE 50 0.21% down even after the country forecast a fiscal 2015 budget surplus. New Zealand is expected to have a fiscal 2013 budget deficit of NZD6.29 billion. The rebuild of Christchurch is expected to help facilitate the surplus. Earlier Thursday, the New Zealand Treasury forecast 2013-2014 GDP growth of 2.3% and 2014-2015 growth of 2.8%. The economy there grew 3% last year.
China's Shanghai-exchange listed shares surged today, sending the benchmark Shanghai Composite index 1.2% up at 2251.8, on the top of prior day 0.35% gain, on optimism about market liquidity after official data showed after data showed foreign inflows to China accelerated in April.
The People's Bank of China said on Wednesday that China purchased 294.4 billion yuan of foreign exchanges in April, up from 236.3 billion in March. Funds outstanding for foreign exchange in domestic financial institutions increased 1.51 trillion yuan in the first four months this year, compared with 494.6 billion yuan for the whole of 2012, the central bank said.
Hong Kong's share market closed modest higher on tracking cues from overnight rally on Wall Street and China's funds flow data. But concerns about Chinese economic growth capped upside. The benchmark Hang Seng Index rose 0.17% to 23,082.68, registering second day of winning streak. Among the 50 HK blue chips, 22 rose and 24 fell, with 4 stocks remaining steady. Tencent soared 6.5% to HK$292.2 after announcing 37% growth in 1Q earnings, while Esprit slid 3% to HK$10.94, making themselves the largest blue-chip gainer and loser.
India's benchmark indices nudged higher as index heavyweight Reliance Industries (RIL) gained. The barometer index, the S&P BSE Sensex, was provisionally up 34.31 points or 0.7%, off close to 80 points from the day's high and up about 85 points from the day's low. Index heavyweight and cigarette major ITC dropped ahead of its Q4 results tomorrow, 17 May 2013. Auto stocks fell. Bajaj Auto declined on reporting weak Q4 results. Pharma stocks rose on renewed buying, with Lupin hitting record high and Glenmark Pharmaceuticals hitting 52-week high. Reliance Capital turned volatile after reporting weak Q4 results. Indian stocks gained for the third straight day today, 16 May 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1646.95 crore on Wednesday, 15 May 2013, as per provisional data from the stock exchanges.
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